Time to stop subsidies for big business

March 1, 2012

Changes in the tax code proposed by President Barack Obama no doubt will be debated hotly in Congress. While his plan to reduce corporate taxes is appealing, his back-door strategy to keep pumping money into the federal treasury by massive tax increases elsewhere is not.

But most members of Congress should be able to unite behind another of Obama's recommendations - to eliminate corporate welfare-style tax breaks for certain types of businesses.

The idea is nothing new. It has been suggested, off and on, for decades. In the past, however, powerful special interests have been able to block changes in their cherished loopholes and subsidies.

Obama ought to be very familiar with how recipients of corporate welfare can cozy up to policymakers. One of his top financial advisers is Jeffrey Immelt, CEO of General Electric. In 2010, GE earned a whopping $14.2 billion in profits - yet did not pay a dime in U.S. corporate taxes. In fact, the company scooped up $3.2 billion in U.S. incentives, it has been reported.

Americans are familiar with the fiasco of tax breaks, subsidies and incentives. Big corporate farms rake in billions a year in agriculture subsidies. Big oil sucks up billions more in other breaks, even when the business is wildly profitable. And yes, the "alternative energy" industry - unable to make it on its own - survives entirely on taxpayer subsidies in some cases.

It is time to make a clean sweep of corporate welfare, not necessarily to help balance the federal budget, but simply because continuing to subsidize profitable big businesses is wrong.